For 2.8 million Americans, even a lifetime of work has not been enough to pay off their student loans. While about 700,000 Americans were carrying student loan debt into retirement in 2005, today that number has quadrupled and is not showing signs of stopping.

Americans over the age of 50 are carrying nearly 20 percent of all student loan debt with more than $260 billion owed. In 2004, the student debt balance for those over 50 was $36 billion, a 720 percent increase in 14 years.

Saving for retirement has already become increasingly difficult for aging Americans, with education debt only worsening the problem.

Working to death

Those with student loans in their later stages of life are able to save less for retirement than their peers. The median individual retirement account savings among those in their fifties with student loans is nearly half that of those without student loans. Student loan holders also hold less in 401(k) savings.

Lack of savings and monthly loan payments are forcing many to continue working well past 65. Even as many of their peers retire, aging debt holders must push on.

Defaulting and the paradox of debt “forgiveness”

37 percent of student loan borrowers over 65 and 29 percent between 50 and 64 are in default. For those under 50, only 17 percent of borrowers are in default.

After a certain amount of years on an income-driven repayment plan, the government cancels the borrower’s remaining debt. This comes with little relief, however, as the IRS considers forgiven student loans to be taxable income. The tax bill is often still too high for forgiven borrowers to pay. In this case, the IRS can take a portion of their Social Security for the unpaid debt, leaving little money for basic necessities.